Exploration & Production | Production | Forecast - Production | Hedging | Capital Markets
Matador Hits 2.1 MMBOE Production Record; Reaffirms Guidance
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Matador Resources Company reported the following update of its ongoing operations.
Production Update
Matador achieved record quarterly production of approximately 2.1 million BOE for the first quarter of 2015. Production for the first quarter of 2015 was almost double the 1.1 million BOE produced in the first quarter of 2014 and up about 10% sequentially from 1.9 million BOE produced in the fourth quarter of 2014. First quarter 2015 production was ahead of the Company’s estimates by about 10% as a result of better-than-expected performance from newly completed wells in both the Delaware Basin and the Eagle Ford shale, as well as earlier completion dates on several Eagle Ford wells leading to less shut-in production during the first quarter.
For the month of March 2015, Matador’s average daily oil equivalent production increased to approximately 25,000 BOE per day for the first time in the Company’s history. In addition, during the last two weeks of March 2015, once the newly completed and temporarily shut-in Eagle Ford wells were placed on production, Matador’s daily oil equivalent production was as high as 29,000 BOE per day and averaged approximately 27,000 BOE per day (51% oil), including 14,000 barrels of oil per day and 80 million cubic feet of natural gas per day.
Operational Update
The company has updated its Texas operations, which can be accessed below:
Matador Touts 24-Hour IP Rates at Wolfcamp B, X Wells
Matador Talks Haynesville Results; Suspension of Eagle Ford Ops
Liquidity Update
At April 3, 2015, the borrowing base under the Company’s revolving credit facility was $450.0 million, based on the lenders’ review of Matador’s proved oil and natural gas reserves at July 31, 2014. At April 3, 2015, the Company had $410.0 million of outstanding long-term borrowings under the Company’s revolving credit facility and approximately $0.6 million in outstanding letters of credit under that facility, with approximately $12.0 million of additional indebtedness assumed in connection with the Company’s February 2015 merger with Harvey E. Yates Company. Matador’s bank group is currently completing the Spring 2015 redetermination of its borrowing base, and the Company expects its borrowing base will be reaffirmed at $450.0 million and its conforming borrowing base will be reaffirmed at $375.0 million.
Hedging Positions
From time to time, Matador uses derivative financial instruments to mitigate its exposure to commodity price risk associated with oil, natural gas and natural gas liquids prices and to protect its cash flows and borrowing capacity.
At April 3, 2015, Matador had the following hedges in place, in the form of costless collars and swaps, for the remainder of 2015.
- Approximately 1.3 million barrels of oil at a weighted average floor price of $83 per barrel and a weighted average ceiling price of $100 per barrel.
- Approximately 11.3 billion cubic feet of natural gas at a weighted average floor price of $3.27 per MMBtu and a weighted average ceiling price of $3.96 per MMBtu.
- Approximately 2.9 million gallons of natural gas liquids at a weighted average price of $1.02 per gallon.
Matador estimates that it has approximately 40% of its anticipated oil production and approximately 70% of its anticipated natural gas production hedged for the remainder of 2015.
At April 3, 2015, Matador had the following hedges in place, in the form of costless collars and swaps, for 2016.
- Approximately 2.4 billion cubic feet of natural gas at a weighted average floor price of $2.75 per MMBtu and a weighted average ceiling price of $3.50 per MMBtu.
Approval of Charter Amendment
The Company is pleased to announce that at its special meeting of shareholders held on April 2, 2015, the Company’s shareholders approved an amendment to the Amended and Restated Certificate of Formation of the Company to increase the amount of authorized common stock from 80,000,000 shares to 120,000,000 shares and correspondingly increase the aggregate number of authorized shares from 82,000,000 shares to 122,000,000 shares. Following receipt of confirmation of the filing of the Amendment with the Secretary of State of the State of Texas, all of the shares of the Company’s new class of Series A Convertible Preferred Stock that were issued to HEYCO Energy Group, Inc. upon the closing of the Company’s recent merger with HEYCO will be converted into shares of the Company’s common stock. Following this conversion, the Company will have no shares of preferred stock issued and outstanding. The owners of over 80% of the Company’s outstanding shares of common stock responded to the proposal and voted. Of those voting, over 99% of the shares were voted in favor of the Amendment. The staff and the Board of Directors of the Company greatly appreciate the significant show of support and confidence by its shareholders as reflected in the overwhelming approval of the Amendment, which was an important component of the HEYCO merger and Matador’s plans moving forward.
2015 Guidance Affirmation
Matador reaffirms the 2015 guidance estimates previously announced at its Analyst Day presentation on February 5, 2015 and reaffirmed on March 2, 2015, including (1) capital expenditures of $350 million (excluding the HEYCO merger), (2) total oil production of 4.0 to 4.2 million barrels, (3) total natural gas production of 24.0 to 26.0 billion cubic feet, (4) oil and natural gas revenues of $270 to $290 million and (5) Adjusted EBITDA of $200 to $220 million. Oil and natural gas revenues and Adjusted EBITDA guidance are based on an estimated weighted average realized oil price of $50.00 per barrel and an estimated weighted average realized natural gas price of $3.00 per thousand cubic feet for 2015.